Author Archive

The Walking Man

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One of the best parts of my job as a commercial real estate broker is not being tied to my desk for 10 hours per day. Typically, I have several meetings every day all over downtown Chicago and I always try to walk to and from these no matter the distance.

By doing this, it helps me keep tabs on the pulse of the city and gives me a chance to clear my head while I mentally prepare for my next showing. Plus, it is really the only form of exercise I get these days.

While roaming the streets with my patented fast-paced steps, I am always fascinated by the vast number of people asking for money; it seems like someone can be found panhandling on just about every Loop corner. Some of these individuals have been parked at the same location for years, while others strategically move from one location to the next. While there are exceptions, most of these people are simply down on their luck and are fairly harmless. Admittedly, I have never taken the time to get to know any one of these people by name, but over time I have started to recognize them as part of the unique fabric that makes up downtown Chicago.

For example, anyone who works in the vicinity of Clark and Madison knows of the “World’s Finest Chocolate Lady” who bellows in an annoyingly boisterous tone for 8 hours a day. Patrons of Ogilvie Transportation Center are likely familiar with the woman who sits on the Madison Street bridge everyday with resumes in hand in case a compassionate person has a job to offer, while politely asking for loose change to help her get through the day. The cast of characters is endless.

Part of me wants to stop and help every one of these people, but I cannot help being skeptical. I will never forget going to a Bulls game at the old Chicago Stadium and seeing a man in a wheelchair begging for money to help with his disability. After the game, I saw a car pull up next to him in an alley and watched him stand up from his chair, fold it up into the trunk and then walk into the car bragging to his friend about how much money he had just made. There was another instance where I gave some loose change to a beggar, only to have it thrown back in my face because it wasn’t enough. I was even scammed once by a sob story that I bought–hook, line and sinker–only to find out later that the guy was a complete fraud. Because of these incidents, I cannot bring myself to donate money to street people anymore.

However, a recent story in the news about one of these aforementioned characters known to many as the “Walking Man” really raised my ire. I have observed him wandering the streets of the Loop, Michigan Avenue, Streeterville, Gold Coast and Old Town for over 20 years. He has a very distinctive look: long, wavy, silver hair (it was black when I first noticed him), a bushy mustache and always clad in a white v-neck t-shirt and a sport coat. He has a mysterious look to him: part distinguished and part disheveled. He generally keeps to himself and never bothers anyone, always seeming to be wandering around with no particular place to go. Often, I have wondered what the story is with the Walking Man. Who is he and how did he get to where he is now?

Fast forward to this week when I was stunned to see a news story in which this man was brutally attacked on Lower Wacker Drive and by all accounts, is lucky to still be alive. The attack was so vicious that he has severe damage to his legs and may never regain eyesight.

As more details came out, though, we learned more about this mystery man. His name is Joseph Kromelis. He is a transient who goes from one homeless shelter to the next and has no family left, other than a nephew and an estranged sister who lives in Alaska. Certainly, he has no money to pay his medical bills and subsequent rehabilitation that awaits.

Everyday, I see stories in the Chicago news that make me shake my head and wonder what the heck is going on in this town. However, the outpouring of support and financial assistance to Joseph warms my heart and shows that in spite of the multitude of issues, we are still, for the most part, a city of genuinely good and compassionate individuals.

The Walking Man’s nephew has set up a Go Fund Me page for his uncle and I have donated some money. While I do not know Joseph personally, he is such a familiar face that I feel like we are old acquaintances. I figure this is as good of a time as any to break my policy.

If you would like to contribute to Joseph, please click here

What Did I Ever Do To Them?

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The scene: The Old Town Ale House, on the southeast corner of North and Wieland. It is a sleepy Tuesday night in October in the city of Chicago. LaSalle Street somberly walks into its favorite watering hole and bellies up to the bar. LaSalle’s old friend, Bobby, is bartending tonight.

LaSalle: Hey, Bobby. Scotch on the rocks and make it a double, will ya?

Bobby: Sure, LaSalle. You seem down tonight. What’s troubling you?

LaSalle: I just don’t get it. First, it was all of the trading firms going away. Then, the Roanoke Building, the New York Life Building, and Barrister Hall all got rid of all their office tenants. Now, Northern Trust, Bank of America AND BMO Harris want to leave me. What did I ever do to them?

Bobby: As Dylan once said, the times they are a-changin’. I guess you can’t stop progress.

LaSalle: Progress my left curb! I am LaSalle Street, damn it! You know, the most prestigious thoroughfare in downtown Chicago? The home of local and national banking headquarters, important financial institutions, the most cutting-edge trading firms and some of the city’s most powerful law firms. If you have a business in one of these industries, you know you hit the big time if your office has a LaSalle Street address. Gaze south down my famed canyon all the way to the Board of Trade, you cannot tell me you are not awed by the brilliant architecture and fascinating histories of each edifice. My street is clearly the place to be!

Bobby: No doubt, it’s been a great run.

LaSalle: Heck, the ‘85 Bears, the greatest football team ever assembled, chose my street for their ticker tape parade to celebrate their Super Bowl XX victory. Ditka, Payton, McMahon, Singletary, Fridge. It don’t get better than that! The ‘05 Sox picked me, too. Get me another Scotch.

Bobby: Coming right up. With all due respect, sometimes you gotta get with the times and adapt.

LaSalle: Adapt? Why? I have the greatest location in the city. Close to the courts, trains, business headquarters. City Hall is right here. So is The Fed. I got it all!

Bobby: Your location is dynamite, La Salle, but technology is changing the way firms office. There is a lot of action west of you right now, especially along the river. People like views of the river, a short walk to the trains, new glass and steel towers with efficient floor plates, and no columns or dropped ceilings. Then there are all the amenities, like rooftop decks, fitness centers, and game rooms…it gets tough for older buildings to compete.

LaSalle: Come on, you’re telling me tenants no longer want dropped ceilings, oversized offices with paneling on the walls, columns, or fluorescent lights with flat acrylic covers? And these views and amenities you mention, people come to work to do work, not stare out the window and play around.

Bobby: These darn Millennials are changing everything.

LaSalle: (staring blankly into his nearly empty glass): You know, I guess I should have seen it coming when all those trading firms started leaving the Board of Trade; then ABM AMRO left 208 South LaSalle, practically emptying out the building. Now there are TWO hotels there, not to mention two more down the street at 39 South and 11 South. Heck, I hear 29 South is even being turned into apartments. Imagine that, people living on my street. I never thought I’d see it.

Bobby: LaSalle, isn’t this a good thing? Beats having empty, worn down buildings.

LaSalle: I guess, but I still can’t understand why all these businesses are leaving. Who’s next?
Bobby: Not everyone is gone. Didn’t CIBC just sign a big new lease at 120 South and Wintrust, too, over at 231 South? Plus, Northern Trust has recommitted to staying at 50 South. These are all big deals!
LaSalle: True. Another scotch.

Bobby:Slow down, big guy. This one’s on me. Then I am going to call you a cab.

LaSalle: Sure, but make it a cab, not one of those Uber things.

Bobby: Look, if I were you, I would view this as an opportunity for a fresh beginning. Just think, you can redefine yourself as a place where people, work, live AND play. Plus, the office component is never going away completely. The Rookery is still one of the all-time greats and very few buildings can compare with the elegance of 190 South and 120 South; 120 North, too, for that matter.

LaSalle: I am proud of those beauties.

Bobby: And look at 1 North LaSalle. The building sold, the new owners tore out ceilings, created a swanky lounge, outdoor space, fitness center, and all kinds of modern amenities. The occupancy shot up and I hear it just sold again for a fortune.

LaSalle: No doubt that’s encouraging, but how are 115 South, 135 South, and 231 South going to survive when their big boys leave? Those will not be easy spaces to lease.

Bobby: They will figure it out. These real estate guys are smart. Maybe they will break the space up into smaller suites. Perhaps they will get lucky and stumble upon a big user, maybe they go residential or hotel or even do co-working?

LaSalle: I don’t get that whole co-working thing, but heck, if WeWork wants to come in and lease 100,000 square feet, who am I to stop them?

Bobby: Keep the faith, good buddy, you have one of the most convenient locations in the city, great history, and amazing architecture; no one will forget about you. It’s simply time to write the next chapter.

LaSalle: Thanks, pal. You always know how to make me feel better. Three scotches don’t hurt either.

Bobby: Anytime. Drop on by to celebrate your next new lease or redevelopment announcement.

LaSalle then stumbles out into the night and hops into a cab, still feeling nervous, but a bit more optimistic about what the future holds.

Retro Chicago

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So, Chicago is going to have a new mayor in 2019. In reviewing the rather uninspiring list of candidates thus far, the thought crossed my mind: what could one of them do to step up to the forefront and win my support? Here are 25 suggestions:

1) Issue an edict permanently renaming 233 South Wacker Drive as “The Sears Tower” and 875 North Michigan as “The John Hancock Center” until the end of time.

2) Macy’s, back to New York you go! Welcome back, Marshall Fields. I miss those green bags. While we are at it, as beautiful as the renovated Sullivan Center turned out, let’s bring back Carson Pirie Scott as well.

3) The city should have never bothered pushing the Block 37 development. Skate on State was just fine. Haul in the hoses and cold weather and lace up those skates.

4) Immediately reconstruct 300 West Washington. I never understood why this building was demolished and the land is still sitting empty 20 years later.

5) Restore service to the State & Washington Red Line station.

6) While on the topic of the CTA, bring back the tokens. No particular reason.

7) There are so many dearly departed restaurants which need to be re-opened. For starters, there is a huge void in the hot dog category. Fluky’s, Demon Dogs, Hot Doug’s and Irving’s shall be reconstituted day one of the new administration. As a side note, declare putting ketchup on a hot dog a Class B felony.

8) Other restaurants that will be making a comeback: Las Pinatas, Ina’s, Basta Pasta, Greektown Gyros (oh how I miss the 3:00 AM gyro, pizza puff, and cheese fry combo), Bones, Chicago Brauhaus, and Sabatino’s (you are not really closing soon, are you?)

9) We cannot leave out the classic bars and taverns that need to reappear: John Barleycorn on Lincoln, McCuddy’s, Life’s Too Short, The Artful Dodger, The Big Nasty (including Elvis on the roof), Thurston’s and Lounge Ax.

10) Grocery shopping? One word: Dominick’s. If for no other reason, so they can bring back the “Let’s Go To The Races” game.

11) Guaranteed Rate Field/U.S. Cellular Field shall permanently be re-christened as Comiskey Park.

12) I like the United Center, but it will never compare to the Chicago Stadium. The real Madhouse on Madison shall be reincarnated.

13) Ozzie Guillen shall be signed to a lifetime contract to manage the White Sox. Same thing with Coach Ditka and the Bears, just so we can enjoy the grand return of “The Mike Ditka Show” starring Johnny Morris before every Bears game.

14) Speaking of Johnny, he along with Bill Kurtis, Walter Jacobson, John Coughlin and ace reporter John “Bulldog” Drummond will be restored as the primary Chicago news team. If for some reason they are not available, we will then take back Ron Majors, Carol Marin, John Coleman, and Marc Giangreco.

15) Son of Svengoolie will return to television every night.

16) On the radio, the Loop AM & FM will be back. Classic rock will be covered on the FM side, while the AM will welcome back Johnny B, Kevin Mathews (with Jim Shorts), Steve & Garry and Chet Coppock.

17) For the kids, Costco in Melrose Park will be razed immediately to make way for the return of Kiddieland

18) Enough of Taste of Chicago. ChicagoFest will be a thing once again.

19) This so-called Jane Byrne Interchange will resort back to whatever it was before. That cannot possibly be worse than the traffic mess we have now.

20) For those needing a place to shop for fine clothing, Bigsby & Kruthers shall reclaim its rightful position on Clark Street. While we are at it, bring back Bigsby’s Sports Bar & Grill, too.

21) Parking meter deal? What parking meter deal?

22) Dibs will be legalized.

23) Celozzi-Ettleson (Where you always save more money!) and Schmerler Ford (Home of the Singing Ford Dealer!) are back in business, just so we can experience the legendary commercials again.

24) Enjoy the grand re-opening of Flip Side and Tower Records. After all, vinyl is in vogue again.

25) On a personal note, 100 West Monroe, 11 South LaSalle, 29 South LaSalle, 39 South LaSalle and 203 North Wabash will become office buildings once again.

If there is a mayoral candidate out there who can deliver on at least some of these items, I will be first in line to cast a vote in their favor. Better hurry, the election is right around the corner.

The Pittsfield Building

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“Is the Pittsfield Building cursed?” This is the title of the featured article in a recent edition of Crain’s Chicago Business. (Read it here) Without even reading the story, a sea of memories and emotions washed over me. Why? Because I served as the leasing agent for this mess of a tower for 5 long years and lived to tell the tales.

It was 1996: I was fresh into the real estate business and my attire proved it. Right away, my boss decided that my wardrobe needed an upgrade. He took me over to the Kuppenheimer men’s clothing store located in the Pittsfield lobby and after wandering around for a bit, I was absolutely in awe of the spectacular 5-story atrium, marble finishes and history that oozed from every crevice. That day, I told my boss that we had to find a way to get the leasing assignment. It never happened with him, but little did I know what the future would hold.

Four years later, I was awarded the leasing assignment and it felt like a significant step forward in my effort to build the commercial operation of Rubloff. We were quite excited, especially since our appointment was with the promise that the building was about to be declared a Chicago landmark and embark on a substantial renovation. A public relations firm was hired to promote “the rebirth of the Pittsfield” which was to include modernized elevators, mechanical systems and common areas, as well as a scrubbing of the classic facade back to its original color. I was still under the notion that for many years, this classic Loop tower located at 55 East Washington had a rather prestigious reputation—or so I thought.

Our very first day on the job, my late partner, Matt Gould, and I took up every bit of 7 hours to walk through all the vacancies. The list was so overwhelming that we had to assign grades to each space, A – F. For leasing purposes, we decided that only the A and B suites were to be shown, occasionally the Cs, but the Ds and Fs were off limits until they were fixed up.

After a full day of suite grading, we were mentally exhausted and collapsed into the seats of the legendary Pittsfield Café in the lobby. We sat and ate cheeseburgers while we wondered what the heck we had gotten ourselves into. It did not take us long to figure out how dysfunctional this situation was.

I have endured numerous difficult landlord representation assignments over the years, but nothing quite compares to Pittsfield.

Just in the first year, we witnessed the chief engineer getting fired for stealing a conference table in the middle of the night, another engineer getting fired for allegedly reporting a code violation to get revenge against a perceived slight by the building manager, build outs being completely botched or sometimes not even started at all, bills never being paid on time (especially ours), and got stuck in an elevator during a showing with a woman who then started hyperventilating. The overriding source of angst, however, was an owner who made it next to impossible to lease space.

He insisted on using a 32% common area loss factor, applied to existing tenants on renewals (hey tenant, so, your 500 square foot space was remeasured and is now 800 square feet, and your rent is also increasing!) as well as new deals, had a completely overblown view of what the rents should be, refused to fix up vacancies and generally was averse to spending money on just about everything. Deals were few and far between and frustration set in quickly.

When Matt informed me that he was making the switch to another firm, the very next thing I did was resign the account. After 5 years, ridding myself of this albatross was a tremendous relief. Since then, there seemingly have been never-ending efforts to redevelop the building and move away from office use.

Like so many vintage properties in downtown Chicago which recently have received a new lease on life, Pittsfield deserves to have a similar fate. Fixed up with a well-capitalized developer, it would make a wonderful hotel or apartment building; it has an amazing location and there is just too much natural beauty in this landmark for it to waste away. I will continue to sit on the sidelines as an interested observer, hoping for the best – and grateful to not be involved. So, is the building cursed? Well, maybe a little.

An Office-Filled Summer

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I’m going to try to keep this short and simple, so bear with me.

This summer I had an experience like no other. It wasn’t so much the actual labor that was most memorable, but the people and environment that I was surrounded with. This summer I met some amazing people, had some laughs, got rained on more than a couple of times, fell asleep on a train, ate chipotle almost every day, and so much more. But before I get into all of that, I first want to talk about the person that afforded me this great experience.

When I was first told I would be able to work downtown this summer, I didn’t really know what to think. I live 50 minutes or so outside of the city, so the only way to get downtown would be to take the train there and back every day. Then, naturally, I was a little nervous about going to work for someone I had never met before. I had heard great things about Jonathan, but I really didn’t know what to expect. Soon I would come to realize that Jonathan was one of the most honest, sincere, funny, and honorable people I had ever met. The first thing that struck me about Jonathan is that he is one of the most knowledgeable people about the downtown Chicago office market that there is. I remember just walking to a building and on the way Jonathan would tell me the history of the entire area building by building. It amazes me the vast knowledge he possesses in that area. Also, he truly cares about the people he represents. Jonathan always went out of his way to make sure the tenants he put in his buildings had everything they needed. He made sure they were happy with their decision, even if it meant turning away a deal. Jonathan also has to be the hardest working person I know. He puts his all into his company, so it is no surprise that he has such an impressive list of buildings to his name. Everybody he comes into contact with raves about how he handles himself and appreciates the honesty they get out of him as well. I can honestly say that I am so fortunate to have worked for someone who does everything the right way. He has set a great example about what to do to be successful and how to treat people the right way. In the end, Jonathan is someone I look up to and someone I will always consider to be my mentor and role model.

I hope she doesn’t think I’m forgetting about her, but I also worked with another great person named Jillian. The first thing that struck me about Jillian was just her infectious energy. She is the type of person that you want to be around because she is always working and it makes you want to work harder. As the marketing director, she handles the marketing of the buildings, which isn’t always an easy task. But let me tell you, she is very talented. The interactive flyers she creates, along with the edits and videos she makes; everything looks like it had been done by a team of computer nerds working around the clock. But she creates them by herself, and every time I see one I am more and more impressed by her. Her talents and personality will get her very far in life, and it is easy to see what Jonathan saw in her when he first hired her. I couldn’t think of a better co-worker to have for the summer.

I really feel like I have learned as much about office leasing in Chicago as I could grasp. But while rent rolls, vacancy lists, contacting tenants, dimensions, updated websites, and lease expirations are very valuable to know, I learned some other things as well. I would argue, more importantly, I learned a little bit about life and doing business in the real world. I learned that getting caught in the rain happens, and you just have to shrug it off and carry on. I learned that there are some strange people out there who try and pretend to be someone they are not. I learned not to breathe heavy under bridges because of how bad the pigeon stench is. Ok, maybe that last one is a little exaggerated; but in all seriousness the most important thing I learned was how to deal with people.

Watching Jonathan work with people really showed me the right way to do things. I learned that rejection is part of the job, and you are going to get rejected more than you are going to hear yes. I learned that connections are very important, so be nice to everyone because you never know when you may need something from them or run into them again. I also learned to be selfless. Always put the client first, even if that means missing out on a deal. People remember when you do things like that, and most of the time it will come back to help you at some point in your career. Lessons like those and countless others I don’t have time to mention are my biggest takeaways from this summer. As the summer winds to an end, I can say this summer provided me with the greatest experience I could have hoped for. Not only did I learn valuable information about how to lease office space, I learned a lot about life and how to do things the right way. I had the best teacher in Jonathan to help me grasp everything I could, and I met some great people along the way. This is a summer I will never forget. And to Jonathan and Jillian: thank you so much for allowing me to be a part of Willard Jones for the summer.

Anything But Boring

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Unless you have recently been vacationing on Mars, it is tough to have missed the thrilling news that Elon Musk’s Boring Company has been awarded the contract to construct an express train from O’Hare International Airport to downtown Chicago. A project that would bring back to life the abandoned “superstation” at State and Washington, underneath Block 37. This innovative mode of transit would feature the construction of an 18-mile underground tunnel populated by autonomous pods traveling at speeds as high as 150 miles per hour. Even better? Boring’s ultra-aggressive schedule aims to have the trains operating within the next 2 years.

A 12-minute train ride from O’Hare to the Loop for $25? Sign me up! Let’s face it, sitting in a car or cab during rush hour trying to get to the airport from downtown (and vice versa) can be a nightmare. If you can pull it off in under an hour, immediately go purchase a lottery ticket. Alternatively, while the perennially-crowded Blue Line will eventually get you there and for less money, it is not the most pleasant ride–especially when traveling with cumbersome luggage.

In addition to the convenience and economic benefits, Musk is planning to self-finance this billion-dollar (estimated) project, so what is the risk? Assuming it all pans out, this is the exact type of innovation that the city needs in order to compete on a global scale. Is this an absolute necessity? Of course not. However, I fail to see the harm and, though it is the state of the world today, it still surprises me that some people are complaining about this proposal.

The skepticism is understandable; after all, this revolutionary technology has never been utilized before. Previous deep tunnel projects have cost significantly more money to construct and have taken much longer to build. Furthermore, local and state governments have not really had a chance yet to pick apart the details and determine how this will be regulated and policed. Chances are high that there will be cost overruns and unanticipated surprises along the way that will delay the completion of the project. How do we really know there will be no disruption on the ground while digging is happening below? Will there be environmental issues? Or the inevitable legal issues that always seem to arise in Chicago? What if the Boring Company abandons the project halfway through, leaving us with a partially-built tunnel to nowhere? Will taxpayers ultimately end up being hit with some of the bill, no matter what is promised? A lot of people’s support, including my own, would disappear if this were to happen.

From a real estate standpoint, though, the impact of this completed project would be tremendous. I can envision the marketing campaigns now: *insert address here* – just 20 minutes away from O’Hare airport! This innovation would be yet another strong reason for businesses and corporate headquarters to locate or relocate downtown. Paying attention Amazon?

Bringing the long-abandoned State/Washington train station back to life would also be a huge development. The increase in pedestrian traffic would cause interest, as well as, real estate values to surge in this sleepy mall, not to mention the surrounding areas. Count on this to be another excuse to justify driving up rents and sales prices of assets.

Chicagoans should be rooting for this transformative project to succeed, not only for the reasons mentioned above but also for where else this technology could lead. If this can really be built for “only 1 billion dollars,” it could lead to the rapid development of similar express trains, not only to other parts of the city but also to suburbs and even other states as well. Given Chicago’s prime central location and numerous attributes, it could arguably stand to benefit more than any other American city.

All in all, I argue that this is an idea worth exploring. Once the potential pitfalls are worked through to the reasonable satisfaction of all parties, let the boring begin!

The Automated Bully

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In almost every industry, price increases are typical from time to time. Most people, while never happy about it, generally understand that there are a lot of reasons for nominal increases–improved features or products, the rate of inflation, etc.

Earlier this month, however, I received an email from Costar Group announcing that my firm’s LoopNet membership fee was increasing by 385%. 385%! Imagine what you could do if you were selling a product, able to implement that very price hike, and get away with it. I sure wish I could do that with my fees.

CoStar’s reason for the increase? “It has been several years since there has been a price adjustment” and “to more accurately reflect the value listers receive from exposure to 83% of all people searching for commercial real estate online as well as 95% of the top 1,000 brokerage firms.” I am not totally sure what that means, but I can definitely state that despite this alleged exposure, the number of leads LoopNet has generated for my office has increased 0%.

It gets worse. With my CoStar contract set to expire, I inquired about removing one of our users, since this individual is essentially moving towards retirement and has not logged onto the site in over 6 months. Of course, the almighty cyber-tyrant nixed that and told me that if I am holding this person’s license, he or she MUST have a CoStar account. Because I am sure that this extra $300 a month from my firm is what is keeping their $15 billion dollar organization afloat.

Willard Jones Real Estate is very small business and once the new fees kick in, CoStar/LoopNet costs will be greater than what I pay for the salaries and rent. While the CBREs and JLLs of the world can handle these increases without problem due to their size and profitability, it is much more difficult for a firm of my size to absorb this.

I have complained and complained to CoStar about their overbearing fees to no avail and the sad truth remains that in spite of it all, as brokers, it is very difficult to effectively do our jobs without CoStar and LoopNet–and they know it. Whenever a legitimate competitor emerges, they throw their billions of dollars around to either buy them out or sue them to death until they have no choice but to fold (see Xceligent).

Many, including myself, were excited when Xceligent announced their intention to enter into the Chicago market, hopeful that there would finally be a viable alternative. Honestly, I was strongly considering switching over. The data appeared to be adequate, the advertised price was substantially less, and management was much more flexible and willing to structure their programs on a company-by-company basis. Then, the big bully sued sent out an embarrassing mailing that made sophomoric accusations and ultimately drove Xceligent to fold like a house of cards.

To this day, I wonder why a legitimate competitor cannot emerge. Why can’t someone finally stand up to the CoStar Group bully and send a message that enough is enough? Sure, no one is forcing me to remain a customer; I could walk away tomorrow but all that would do is inhibit my ability to do my job.

Still, I dream of the day a more equitable marketplace will emerge; but until then, saps like me have no choice but to sit back and take it. Well, CoStar, all I can say is that if I am going to be spending this additional money every month, your 385% worth of improvements better damn well give me about 385% more business.

How to Master the Landlord Representation Process

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Willard Jones Real Estate hit a milestone moment. For my entire career, I have wanted to represent 105 West Madison and just recently, we were appointed as the exclusive leasing agent of the building.

As much as there is a yearning to dive right in and hit the ground running, I know there is quite a bit of work to do before we are in a realistic position to start leasing space.

After over 20 years in the business, I’ve established a list of things that need to be figured out to create a smooth transition for the brokers, landlords, and tenants alike.

Here is a checklist of some of the questions to ask and information to know in order to have success when commencing a new leasing assignment:

1) Structure – Determine how the ownership and management structure is set up. Who are the players involved in every step of the decision-making process when deals are presented? Who analyzes the economics of each proposal? Who reviews financial statements and determines the lease securitization?

2) Space Planning – A qualified architect needs to be brought aboard to prepare existing condition space plans (and CAD files) for the entire property and design conceptual layouts for older suites in need of a fresh look. The architect’s services will also be needed to prepare customized space plans for prospects to help make their requirement fit into a designated suite.

3) Construction – Find out who will be providing construction pricing for each new deal when work is involved. Usually, it is best to have at least 2–sometimes 3 on larger jobs– contractors competitively bid on the project. Who will be performing the work? Does the building have rules and regulations that must be followed? What are the established building standard materials for paint, flooring, lighting, and millwork?

4) Mechanicals – Make friends with the building engineer immediately, as he or she is often the most important person in any building. Get familiar with how the HVAC system works, as well as electric, gas, and elevators.

5) Wiring – Establish who the service providers are for phone and internet service. Is there a riser management company whom tenants must use prior to installing their lines? Is fiber available?

6) Security – Check how often a security guard is present in the lobby. Are tenants and visitors required to sign-in and/or swipe with a key card? How is after-hours access handled?

7) Amenities – Figure out what amenities the building offers. Is there food service on site? A building conference facility, tenant lounge, rooftop deck, or fitness center? Some, if not all of these things are standard requirements today for a prospect to seriously consider moving to a building.

8) Vacancy Analysis – Appearance counts. Each vacancy should be critically evaluated to determine what can be done to help make them lease faster. Are they fine as-is, in need of just a cleaning, or is a complete overhaul required? If there is obvious work needed for anyone to lease the space, it should be done immediately. Often, it is wise to create a few spec suites that are move-in ready for immediate occupancies.

9) Furniture – Given the rapidly growing desire for tenants to lease furnished space, a relationship should be established with a qualified furniture vendor who can stage vacancies or be able to quickly furnish spaces upon demand.

10) Previous Regime – If leasing space has been a challenge in the past, analyze what went wrong with the previous leasing agency and try to learn from their mistakes.

11) Management – Who will be the liaison to help new tenants get settled into the building and deal with maintenance requests, logistical issues, and possible complaints once a tenant moves in?

12) Financials – Learn the current and historical real estate tax and operating expense estimates. What are tenants responsible for?

13) Parking – Does the building have parking? If so, what is the cost? If not, can a deal be worked out with a nearby garage on a discounted basis for tenants?

14) Marketing – Give the building a personality. Taking all of the above into account, what is the best way to position and promote the property to prospective tenants?

Once all of this information is obtained, reasonable goals and expectations can then be set. These points should be continuously re-evaluated until a winning formula is established.
Bringing a building up to full occupancy and keeping it there, is never an easy task. However, by utilizing this checklist, chances are that the path to success will be that much easier.

Where Did All the Stores Go?

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I hate shopping. For me, the ability to purchase things online goes down as one of the greatest phenomena of my lifetime. I don’t have to schlep through stores or circumvent big crowds and I can have things delivered right to my doorstep within days? Sign me up! Based on the high–and rapidly increasing–number of vacant retail spaces, it seems many Americans agree with me.

There is no denying the fact that the internet has permanently changed retail forever. As convenient as internet shopping is, however, part of me aches for the shop owners who dreamed of starting up their own store and poured tons of money and time into making their dreams come true.

Here I go dating myself again, but in my youth, there was no internet. Sure, you could order things from a catalog and have them shipped to you but by and large, if you needed to buy something, you went to a store. Malls, department stores, and retail centers everywhere were thriving. Today, legendary brands such as Sears, Kmart, Toys “R” Us, Radio Shack, JC Penny and Carson Pirie Scott (after 160 years in business) are shuttering a significant number of locations or disappearing completely.

The one that really hit home for me was Toys “R” Us. I used to take on whatever odd jobs I could find around the house or in the neighborhood and diligently save up my allowance so I could visit this kids’ utopia and buy video games (on floppy disks!) for my Commodore 64 computer (which was the greatest gaming computer of all time, but that is an argument for another day). Sure, the games were tons of fun to play, but just getting myself in a position to even go to Toys “R” Us was an accomplishment to be proud of and helped teach me the value of hard work.

Now, store owners are facing a dire call to either adapt to the times or find a new line of work. In order to draw customers, retailers need to present an “experience” and a reason to leave the house. These days, it isn’t unusual to see stores add coffee shops, wine bars and interactive events such as live demonstrations and classroom sessions. This is what it takes today to attract crowds and once they come, people will theoretically want to spend their money.

With retail vacancy rates approaching historic levels, landlords have been forced to change direction as well. Big box closings have left massive holes where anchor tenants once dominated. Today, there is less focus on filling these spaces with other big box stores and more emphasis on creating smaller sized spaces for such uses as restaurants, movie and entertainment venues, health clubs, grocery stores and medical clinics. Investors now seek out retail centers that are “internet-proof” and tenanted with users that cannot be threatened by e-commerce. In fact, in some cases, Landlords are even having to go way outside of the box and convert old big box stores into co-working facilities, office space, distribution centers, hotels or residences. All options are in play moving forward.

Downtown Chicago is a convenient microcosm of what is happening nationwide. The old Carson Pirie Scott Building on State Street is now a landmark office building, anchored by Target on the ground floor and a loft office conversion for the upper floors of Macy’s on State Street is up next.

Even the locations that have traditionally been as good as it gets in terms of visibility and obtaining high rents are no longer a slam dunk. Crate and Barrel, which once dominated a five-story building on Michigan Avenue, is out and a completely new Starbucks experience will take over. Their “roastery” concept will far exceed a typical store and genuinely be interesting to visit. While a company like Starbucks can pull this off, it is fair to wonder how many more retailers can develop a similar experience of this magnitude and be able to afford the rents these locations command.

As shopping experiences evolve, expect more and more of the classic stores to go by the wayside. Tenants will need to get more imaginative and give customers a reason to get away from their computers and phones. As we have learned, in all branches of real estate, change is the only constant. So, what will the new generation of savvy retailers create in the next retail revolution?

It’s Time to Listen

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I can still see the poster hanging in my third-grade classroom: “Listen and silent have the same letters for a reason.” At the time, I thought it was a teacher-way of saying “lights off, voices off”. Fast forward to today, and I now know the poster meant a whole lot more.

Almost all of us talk to people every single day, but dare I say that very few are good listeners? It turns out that listening takes more than just being silent.

So, what does it take to be a good listener and why is it important? Here are 4 things I’ve learned and try to keep in mind:

1. Listen to get out of the small talk rut
“How’s business? How ‘bout this weather we’re having? How ’bout them Sox/Cubs?” Those are good openings, but take it bit further and ask a follow-up question. “What are you looking forward to this month?” “What season is your favorite?” or “How long have you been a fan?” People generally like to talk about themselves. Learn something, remember it, and mention it the next time you see that person. They’ll appreciate you paying attention.

2. Listen and don’t make it about you.
I was talking with one of my friends recently about a problem. By the end of the conversation, I realized our roles had flipped and we had started discussing her similar problem and I became the one listening and giving advice.

When someone is talking, remember: It. Is. Not. About. You. Yes, it’s good to offer relatable points or a similar story if it can help. But listening means you must take a genuine interest in the other person rather than finding ways to make you seem interesting to them. Leave your ego at the door.

3. Listening means you don’t talk. Aim to speak for no more than 90 seconds at a time (unless your point is particularly riveting)
I love my grandma. We all love her. But we know when we get her on the phone, it is going to be a minimum 8-minute straight monologue. I remember a time my dad was talking to her on the phone, fell asleep, woke up some time later and she was still talking, completely oblivious. As much as we enjoy hearing about the “good, fresh, bread” she got on sale (plus she had a coupon, and it was 5% off day because her friend Linda told her about the senior discount last Saturday when she was over at her house to watch the Wild game), it’s nearly impossible to have a true conversation with her. For grandmas, it works. For most of the rest of us, it does not. Be conscious of how the people you are talking to are responding. Conversation is a dialogue, not a monologue.

4. Listen to discover what’s expected of you during the conversation
When I call my dad with a problem, I preface by saying “I just want to get this out” or “I want your help, you can give advice when I’m done”. It’s important to understand your role in listening–what does that person expect from you when they’re done talking? If you’re not in a place for the person to spell it out as clearly as I do for my dad, pay attention to their cues and figure out if they just want a pair of ears or need some advice. If they break in their conversation, say “mhm” and give it a few seconds. If they start back up, they probably just want to let it all out.

I thought grownups had it all figured out, yet it can still be painful for me to go to events where I know I will be faced with hours of small talk and conversations that don’t do anything to grow a relationship. I love connecting, I hate small talk. But I’ve learned that, in the beginning, some of that small talk is necessary. It doesn’t take much more than a good listener, however, to take that small talk and turn it into slightly larger talk.